Ban on Crypto Privacy Tools Would Be Counterproductive: UK Think Tank
The Royal United Services Institute (RUSI) warns that banning blockchain-based privacy tools would push illicit activity to unregulated services, limiting law enforcement’s investigative options. The report stresses the importance of balancing compliance with privacy needs in the cryptocurrency sector, identifying legitimate demand from individuals and entities seeking protection from hackers, AI-enabled data mining, targeted crime, and business confidentiality. Technologies highlighted include zero-knowledge proofs, confidential stablecoins, and privacy pools. Roundtable discussions by UK authorities and industry stakeholders emphasized collaboration over prohibition—advocating that regulators and privacy tool providers cooperate to integrate compliance features, enabling responsible and transparent use. The report concludes that privacy-enhancing mechanisms, particularly zero-knowledge proofs, will likely see increased business adoption, but building trust through public-private cooperation is essential for widespread acceptance.
